Lawpath - Partnership Agreement
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Free Partnership Agreement templates (Australia)
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So you've brainstormed a business idea and found the perfect partner in crime to work with. Now what?
Well, the first step is organising a Partnership Agreement so you both know exactly where you stand. Here, we've explained exactly what to include in your agreement and how to find a free template to make it an easy-breezy process.
What's in this guide?
What is a Partnership Agreement?
A Partnership Agreement is a legally binding contract between two or more parties who would like to work together to operate a business in order to generate profit. It sets out the responsibilities, duties and obligations of each partner, ensuring that the interests of each party are known and protected.
When should I use a Partnership Agreement?
Partnership Agreements should be written and signed at the beginning of a business venture. This will spell out the responsibilities of each partner and ensure that all owners share a common vision for the business. These agreements should be put in place as early as possible to avoid any awkward disputes later down the road.
What does a Partnership Agreement include?
Partnership Agreements can turn out to be lengthy documents as they are essentially setting out the foundations for your business. Typically, a Partnership Agreement should address the following:
- Percentage of ownership
- Day-to-day responsibilities
- Profit and loss distribution
- Accounting methods
- Length of partnership
- Decision-making process
- Dispute-resolving process
- Binding power
- Withdrawal or death of existing partners
- Admission of new partners
Get access to customisable Partnership Agreement templates online
Does your company belong in this list?
Partnership Agreement vs Joint Venture Agreement
As we've explained above, a Partnership Agreement protects the interests of all partners involved and provides guidance to moderate any disputes that the company may face in the future. Through a Joint Venture Agreement may seem similar to a Partnership Agreement, they are quite different things when it comes down to the legal stuff. Here are a few key differences:
- A joint venture can be made up of individuals, corporations, governments and businesses, whereas a partnership is usually just individuals.
- A joint venture usually comes into fruition to accomplish a specific purpose, whereas a partnership is not limited to a single goal, but geared towards running a long-term business.
- Joint ventures don't always have to have an agreement in place. If they do, the Joint Venture Agreement is usually a short-term contract that addresses the specific need of a certain goal. A Partnership Agreement covers a much more long-term and broad spectrum of topics concerning the business.
- A joint venture is a short-term project, whereas a partnership is designed to last, hopefully, for the lifetime of a business.
- Joint ventures have a limit to what they can achieve, which is dependent on the agreement. Partnerships, on the other hand, are generally unlimited in what they can achieve.
- If something goes wrong in a joint venture, both parties are accused of being at fault, whereas in a partnership usually only the offending party is faced with the fault.
How effective is a Partnership Agreement?
Partnership Agreements are legally binding between the partners of a business. They are created to deal with any sort of situation that might cause confusion, disagreement or change. A well-thought-out agreement, drafted at the beginning of a partnership, is critical to smooth business operations.
Partnership Agreements can help to do the following:
- Define the roles and responsibilities of each partner
- Avoid tax issues within the company
- Avoid legal and liability issues
- Help deal with changes in the business
- Handle conflicts of interest and disputes
Do I need a lawyer to write my Partnership Agreement?
Lawyers are technically not required to write up a Partnership Agreement, but they can be extremely useful. Within Australia, Partnership Agreements are regulated by both the Partnership Act (1963) and the Corporations Act (2001) and have to adhere to different state regulations. Hiring a lawyer to help you draft your document will make sure it remains within the law as well as creating a comprehensive agreement for the business. If you'd rather write the document yourself, make sure you use a legal template that has been drafted with your state laws in mind.
How do I write a Partnership Agreement?
A Partnership Agreement must include clauses that cover all areas of the business, from the day-to-day running of the business to how a partner goes about leaving the business in the future. To write an agreement that all business partners agree to, you must all sit down together and agree on certain terms and conditions to be included in the document. It's best to refer to a legal template for the ins and outs of the document, but the sample provided below should give you an idea of what to include in your Partnership Agreement.
Where to get free legal documents and templates like a Partnership Agreement
Partnership Agreements can be upwards of 15 pages, which is why using a legal template can be extremely useful. It'll make sure that nothing is left unwritten and all the legal jargon is there ready for you. Here is a selection of websites that allow you to view or download a Partnership Agreement template for free.
- Lawpath. Lawpath is an online legal resource for small businesses and entrepreneurs. Users are welcome to browse free samples on its website but must sign-up to access customisation options.
- LawDepot. LawDepot provides a broad array of free online documents to choose from. Fill them in online before downloading the documents straight to your computer.
- LegalVision. LegalVision offers users unlimited use of legal document templates, including a Partnership Agreement, for a monthly membership fee of $199.
- Legal Zebra. Free PDF samples can be downloaded if you sign-up to Legal Zebra's marketing emails. To access customisable documents, the templates will need to be purchased for a one-time fee.
- Wonder.Legal. Browse more than 140 legal document templates with Wonder.Legal, all of which can be purchased for a one-time fee. Despite this, downloading a Partnership Agreement with them is completely free.
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